Brainsway(US:BWAY)2023-03-15 14:41Financial Data and Key Metrics Changes - Revenue for Q4 2022 was $6 million, a 29% decrease compared to $8.5 million in Q4 2021, impacted by the inability to recognize approximately $1 million of lease revenue due to a customer's financial condition [38][44] - For the full year 2022, total revenue was $27.2 million, slightly lower than $29.7 million in 2021 [59] - Gross profit for Q4 2022 was $5.2 million, representing a 75% gross margin, down from $6.6 million and 78% gross margin in the prior year [59] - Operating loss for Q4 was $3.4 million, compared to a loss of $1.5 million in Q4 2021 [44] Business Line Data and Key Metrics Changes - The company placed 33 Deep TMS systems in Q4 2022, with a total installed base of 884 systems, reflecting a 17% growth from 754 systems as of December 31, 2021 [58] - Lease revenue was negatively impacted by the financial condition of one of the largest customers, affecting overall revenue mix [9][10] Market Data and Key Metrics Changes - The company reported strong international momentum, indicating a sustainable trend in direct sales both in the U.S. and internationally [58] - The coverage for Deep TMS for OCD has expanded to approximately 90 million lives, with nearly 50% of the installed base now including OCD treatment capability [29] Company Strategy and Development Direction - The company aims to achieve breakeven operating income by Q4 2023 while demonstrating full-year revenue growth over 2022 [28][37] - Strategic focus includes optimizing the commercial process, enhancing sales efforts towards larger institutional customers, and reevaluating R&D investments [33][34] - The company plans to be opportunistic in business development, particularly in collaborations with mental health clinics to expand faster [28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in a positive outlook for 2023, anticipating annual revenue growth and improvements in cost containment [1][37] - The management acknowledged the challenges posed by a customer's financial condition but remains optimistic about the overall market potential and growth opportunities [55][63] Other Important Information - The company was named to Fast Company's list of the World's Most Innovative Companies for 2023, highlighting its recognition in the industry [36] - A health care policy update allows non-physician practitioners to provide TMS treatment, which is expected to positively impact the market potential [82] Q&A Session Summary Question: What are the assumptions and key risks associated with targeting breakeven operating income in Q4 2023? - Management indicated that necessary measures have been taken to reduce costs, with expected outcomes visible in the second half of 2023 [17][70] Question: Can you provide an update on the impact of a specific customer on lease revenue? - Management confirmed that the impact was contained in Q4 due to the customer's deteriorating financial condition, which is one of the largest customers on a recurring revenue basis [48][58] Question: What is the company's cash runway? - The company reported cash, cash equivalents, and short-term deposits of $47.9 million, indicating a strong cash position to support operations [1][70]